The clock is quietly winding down on Fishermen’s Energy offshore wind project, a proposal its backers say could propel New Jersey into becoming a hub for offshore wind farms, and potentially create hundreds, if not thousands of new manufacturing jobs in the state.
The 25-megawatt pilot, located 2.8 miles off Atlantic City, is the first to come under review by state regulators, but its prospects of moving forward are looking bleaker by the week, if not by the day.
The irony is that the pilot project, despite being backed by the New Jersey Division of Rate Counsel, may falter not because of any action by the state Board of Public Utilities, the agency in charge of deciding whether it moves forward, but because of a failure to act at all.
The developer needs the BPU to act on the project sooner rather than later if it is to obtain lucrative federal investment tax credits crucial to drive down the cost of the pilot and retain the Division of Rate Counsel’s support. The division, which represents the interests of utility customers, opposed the proposal initially as too costly to ratepayers, who will bear much of the expense of developing offshore wind farms.
To qualify for the tax credits, Fishermen’s Energy needs to spend at least $10 million on the project before the end of the year. In July, the BPU balked at approving an agreement reached between Rate Counsel and the developer. In tabling the project, BPU commissioners raised questions about its financial integrity, particularly over a provision to saddle ratepayers with another $19.2 million if financial incentives from the U.S. Department of Energy fall short of the developer’s projections.
The more urgent issue for the developer in the short term is getting some kind of signal from the state that the project will move forward, which would give it confidence to begin investing the money needed to obtain the investment tax credits. In July, when the board deferred any decision on the project, Chris Wissemann, chief executive of Fishermen’s Energy, said making the needed investments was still “doable.’’
Now others associated with the project are not so certain.
“If this doesn’t happen soon — days, weeks — this project will die,’’ said Arnold Staloff, an advisor with the Stanton Group, which is representing XEMC, a Dutch-Chinese manufacturer of wind turbines that will supply the Atlantic City wind farm, if it moves forward. He said XEMC already has spent nearly $20 million on permitting issues related to the project.
Daniel Cohen, president of Fishermen’s Energy, also expressed concerns about the uncertainty, saying the company had full expectations the project would be approved in August.
“The state of New Jersey, by continued delay, will lose the opportunity to be the first in the country to develop offshore wind and to be the hub of an offshore wind manufacturing industry,’’ he said.
Cohen noted the state’s Energy Master Plan calls for the development of more than 1,100 megawatts of offshore wind capacity along the New Jersey coast. “We proposed a project that is consistent with that plan,’’ he said.
Just where the BPU stands on the project is difficult to discern.
At a regular monthly meeting of the agency earlier this month, BPU President Bob Hanna declined to answer questions from NJ Spotlight, although this reporter never got the opportunity to ask precisely about the issue.
When approached, Michael Winka, a senior advisor to Hanna, deflected questions to Jake Gertsman, a BPU legal specialist who is involved in developing offshore wind policies. He bounced the questions to Greg Reinert, the agency’s communications director.
In an e-mail response from Reinert about the issue, he said the project is a contested matter and “will proceed as stated in the presiding commissioner’s scheduling order.’’
Citing many of the procedural orders issued by the BPU, Reinert indicated that most of the delays in the case have been proposed by Fishermen’s Energy.
If the decision is put off until after the November election, it may be too late for the project to qualify for the crucial tax credits, according to others in the offshore wind sector.
To some environmentalists, the issue calls into question the Christie administration’s commitment to developing offshore wind, despite its frequent proclamations about supporting the effort. They view the issue as being held hostage to Gov. Chris Christie’s national ambitions, in which support of offshore wind might be viewed not so positively in GOP presidential primaries in 2016.
Jeff Tittel, the director of the New Jersey Sierra Club and a frequent critic of the administration, was of that opinion when the BPU deferred action on the Fishermen’s project in July. “It looks like they [the BPU] are deliberately trying to come up with ways to delay or sabotage this project and others.’’
There are some elements of the business community that would welcome that strategy. They fear an aggressive offshore wind development program would saddle ratepayers, and businesses, with millions of dollars in new costs on energy bills that already rank among the highest in the nation.
Nevertheless, the public seems to support offshore wind by wide margins.
In a poll conducted for the Sierra Club to be released this morning, 75 percent of those polled favor building offshore wind in the state, according to the results compiled by Monmouth University. Two-thirds of those polled said Gov. Christie should make it a priority for his administration.
“These results confirm what we have seen in prior Monmouth polls,’’ said Patrick Murray, director of the Monmouth University Polling Institute, generally regarded as among the most accurate of polling firms in New Jersey.